Your last line explains everything you question. "There is always a cutoff point "
I'm afraid it doesn't, how do you get to your final handling test only to fail, it demonstrates the failure of the training system up to that point, any weaknesses the student had should have been captured prior to that point, the final handling test is a bit late in the process, and yes I'm aware it's a test. Funny thing about training, a number of WWII pilots were very poor students and some took an inordinate amount of time to solo yet went on to become aces, Kieth "Bluey" Truscott a triple ace for one.